Annual Report 2014/15Detailed Picture

Cultures & Enzymes Division 

(60% of total revenue)

EUR million 2014/15 2013/14
Revenue 518.9 464.4
Organic growth   9% 8%
EBITDA 202.0 178.0
EBIT 163.2 140.1
EBIT margin 31.5% 30.2%
ROIC excluding goodwill 40.3% 34.6%


The Cultures & Enzymes Division supplies cultures, enzymes and probiotics  for the food industry in general and the dairy industry in particular. Chr. Hansen’s ingredients help determine the taste, nutritional value, health benefits and shelf life of a wide variety of end products. Chr. Hansen also assists customers in optimizing production processes, increasing yields and improving quality.

Chr. Hansen is the market leader in cultures and enzymes for the dairy market and has consistently outperformed end market growth.

The dairy market continues to hold attractive growth opportunities driven by fundamental category growth, not least in emerging markets, continued conversion, and consumer and customer needs for better functionality and yield. 


Fundamental growth

According to the Company’s own estimates and based on volume, the global market for fermented milk grew by around 4% in 2014/15, slightly below previous years, primarily due to a slowing market for Greek yogurt in the US.

The market for cheese is estimated to have increased by around 2%, slightly above previous years. The growth was driven primarily by the Americas and APAC regions, while growth in EMEA, especially in the EU, was modest.


Chr. Hansen estimates that, based on volume, 75-80% of the fermented milk market (excluding India) and 45-50% of the cheese market have converted from bulk starter  to DVS® or similar technologies. The conversion rate for cheese and fermented milk increased slightly in 2014/15.


Through innovation, Chr. Hansen creates value for its customers, primarily dairies, with solutions addressing end consumer needs or customers' needs to optimize production processes and distribution.

Chr. Hansen works on developing solutions to help customers meet consumer demands for low sugar, lactose , salt or fat; distinctive texture  and flavors; “clean label” products; and adapting solutions to local taste preferences.

Optimization of production processes and distribution is addressed through innovative solutions that improve yield or efficiency in the customers' production process or in the distribution chain.

Chr. Hansen also continues to optimize its own production processes.

A number of new products were introduced in 2014/15, helping customers improve yield, launch innovative new products and convert to DVS® cultures.


During 2014/15, Chr. Hansen implemented new fermentation capacity in Copenhagen for cultures to support further sales growth and efficiency improvements. Utilization of the new capacity increased during the year with further upscaling of production of specific bacterial strains  continuing into 2015/16.

Positive benefits were realized from the simplification of the enzyme production footprint by consolidating production and blending at fewer locations.

Investments were also made in, among others, a new warehousing facility in Denmark and packaging capacity for frozen cultures in the US.


Revenue increased by 12% to EUR 519 million, corresponding to organic growth of 9%. Organic growth was positively impacted by strong growth in cheese and enzymes. Fermented milk and meat showed solid growth, while organic revenue growth from probiotics was negative.


EBIT amounted to EUR 163 million, compared to EUR 140 million in 2013/14. The EBIT margin was 31.5%, up 1.3 percentage points on 2013/14.

Improved operating efficiency from the new fermentation capacity and optimization of the enzyme production footprint, as well as favorable exchange rates, more than offset the startup costs related to the new capacity and an unfavorable product mix.


The return on invested capital excluding goodwill was 40.3%, compared to 34.6% in 2013/14. Invested capital excluding goodwill decreased by EUR 11 million, or 3%, to EUR 408 million. An increase in invested capital from capacity expansions was more than offset by a reallocation of assets from the Cultures & Enzymes Division to the Health & Nutrition Division.